KUALA LUMPUR (Nov 14): While 2021 was a banner year for technology companies in the Silicon Valley, 2022 has seen mass layoffs.
Data from Crunchbase, which tracks trends, investments and news of global companies from start-ups to the Fortune 1000, show that as of late October this year, more than 52,000 workers in the US tech sector have been laid off.
In a recent report, the firm said tech companies as big as Netflix have slashed jobs this year, with some citing the effects of the Covid-19 pandemic and others pointing to overhiring during periods of rapid growth.
It said that Robinhood, Glossier and Better are just a few of the tech companies that have notably trimmed their headcount in 2022.
Meanwhile, Twitter, Facebook parent Meta, payment platform Stripe, software service firm Salesforce and ride-hailing company Lyft have all laid off double-digit percentages of their workers, involving thousands of engineers, salespeople and support staff.
Others including Google and Amazon have recently initiated hiring slowdowns and freezes.
Earlier in November, Stripe chief executive officer Patrick Collison announced the reduction of the company’s workforce by around 14%.
In a blog post, Collison had said that at the outset of the pandemic in 2020, the world rotated overnight towards e-commerce.
“We witnessed significantly higher growth rates over the course of 2020 and 2021 compared to what we had seen previously.
“As an organisation, we transitioned into a new operating mode and both our revenue and payment volume have since grown more than three times,” he said.
Collison said the world is now shifting again, and is facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding.
Meanwhile, Crunchbase said the public markets have been hit hard in 2022, and that’s trickled down to the private markets.
It said inflation concerns, rising interest rates and geopolitical issues have all contributed to a roller-coaster stock market.
Startups — especially those that benefited from a pandemic boom that’s starting to cool — are feeling the pressure too.
Valuations, particularly at the late stage, have started to dip, and startups say it’s much more difficult to raise new funding in this environment.